Federal prosecutors detailed
their case on Thursday against the teamsters' former political
director, accusing him of conspiring with Democratic Party officials,
the A.F.L.-C.I.O.'s secretary-treasurer and others to siphon union
money to the 1996 re-election drive of Ron Carey, the teamsters'
former president.

In opening statements at the
trial of the former official, William Hamilton, on charges of
embezzling union money, conspiracy, fraud and perjury, Robert
Rice, an assistant United States attorney in Manhattan, said Hamilton
had worked closely with two top Carey campaign officials to divert
$885,000 in union money to the campaign.

Rice asserted that Hamilton
had taken part in several complex schemes in which teamster money
was donated to liberal groups, and in exchange longtime donors
to those groups contributed to the Carey campaign.

Insisting that Hamilton and
the Carey campaign aides had looted the union's treasury, Rice
said, "The scheme can best be described as a swap scheme,
a quid pro quo, a you'll scratch my back and I'll scratch yours."

Hamilton's lawyer, Robert Gage,
said his client was innocent of the charges, which were filed
in April 1998.

Gage asserted that Hamilton
was the victim of swap schemes that he said had been orchestrated
by Carey's direct mail consultant, Martin Davis, to insure that
the Carey campaign had money to pay the $700,000 it owed Davis's
firm for campaign mailings. Davis and Jere Nash, Carey's campaign
manager, have pleaded guilty to carrying out the swap schemes.

Gage described his client as
an idealist who approved big teamster donations to liberal groups,
not to advance Carey's campaign, but to help restore Democratic
control of Congress and elect a Congress that would be friendlier
to unions.

Rice, the prosecutor, said
Hamilton, as well as Davis and Nash, carried out the swap schemes,
in which $735,000 was donated to three liberal groups -- Citizen
Action, the National Council of Senior Citizens and Project Vote.
As part of those schemes, wealthy contributors to those groups
donated $185,000 to the Carey campaign.

Carey narrowly defeated James
P. Hoffa in the 1996 race for the teamsters presidency, but Federal
monitors ordered a new election and ousted Carey from the office
after determining that he had breached his fiduciary duty by not
stopping his campaign aides from carrying out the swap schemes.

Rice described another scheme
in which, he said, Hamilton approved a $150,000 teamster payment
to the A.F.L.-C.I.O. Days afterward, the labor federation contributed
$150,000 to Citizen Action, which in turn paid $100,000 to Davis's
direct-mail firm. The prosecutor said Richard Trumka, the A.F.L.-C.I.O.'s
secretary-treasurer, had requested the $150,000 payment.

Over the last two years, Trumka
has insisted on his innocence and has invoked the Fifth Amendment
in declining to testify on the matter. No charges have been brought
against him.

Rice also said Davis had approached
Terence McAuliffe, the finance chairman of the Clinton-Gore campaign,
to propose a deal in which the teamsters would contribute large
sums to the Democrats if Democratic National Committee officials
got Democratic donors to give to Carey. Rice said McAuliffe had
Davis talk to two other Democratic finance officials, Laura Hartigan
and Richard Sullivan.

Rice said that Sullivan sent
Hamilton a list of suggested contributions to state Democratic
parties and that soon afterward the teamsters donated $236,000
to various state parties. In the past, Federal investigators have
said the Democrats were unsuccessful in finding donors for the
Carey campaign.

McAuliffe, Ms. Hartigan and
Sullivan have all repeatedly denied wrongdoing. No charges have
been brought against any Democratic National Committee officials.

Hamilton was planning to make
the donations to the Democratic state parties, Gage said, even
before Sullivan made his request. Gage argued that Davis and Nash
knew of Hamilton's intention to make large donations to the Democrats
and that Davis parlayed this knowledge to try to manipulate D.N.C.
officials so they would arrange for Democratic donors to give
to Carey.

Many of the details laid out
by prosecutors on Thursday have already been made public, but
the airing of those details in court is bound to once again throw
Democratic and A.F.L. C.I.O. officials on the defensive.

Michael Collins, a spokesman
for the Republican National Committee, did not hide the Republicans'
intent to gain political mileage from the trial.

"It's very important for
the country to understand how a million dollars in workers' money
was diverted to the benefit of the Clinton-Gore '96 campaign and
the Democratic National Committee," he said. "What's
going to be obvious is there are a lot of people who should be
sitting in the dock with Hamilton."

Jennifer Backus, the committee's
press secretary, said, "This matter has been investigated
by three Congressional committees as well as the Justice Department,
and these investigations turned up no indication that any D.N.C.
employee or official acted in any improper or unlawful way."

In his remarks, Rice called
the defendant a "teamster insider." But Gage countered
by telling the jury that Hamilton, 57, had spent many years working
for civil rights and abortion rights and had more recently fought
"the Gingrich Congress" and Republican efforts to undercutworkers' rights.